Re: Employer expense as a % not calculating correctly

Here are two of them (every single one is incorrect but not by the same amount/percentage) - sorry, the second example is over two screen shots as there are quite a lot of categories in some of our payroll. The examples I've given are a salary set up and a wages set up where hours etc change each week.

Re: Employer expense as a % not calculating correctly

Based on what I can see the calculation is actually working correctly from a software point of view.

What expense payroll categories will do is look at the full calendar month's worth of pays to determine the value on the pay. This does mean that if a rate is changed or something is adjusted on the category you may end up with a higher value than you would expect as its back-calculating for the calendar month.

For example, if you paid $100 and had the calculation percentage set to be 1% the expense value would be $1. If you then updated the expense calculation rate to be 5% and processed another pay for the employee within the same month ($100 pay again) the expense on that pay would be $9. This is calculated as ((2 x 100) x 5%) - 1 or in other words ((what is being paid for the month) multiplied by the current expense calculation) minus what has already been deducted for the month.

What I would recommend doing to everyone that is finding that their expense is not calculating as they would expect is:

Go to the Payroll>>Payroll Categories>>Expense>>Select the desired category. Take note of the Calculation basis. Select the Exempt button and take note of the categories that are ticked in that window.

Go to the Card File>>Card Lists>>Select the Employee>>Payroll Details tab>>Pay History (LEFT-hand side) and select to show the pay history for the calendar month. Add up all the wage categories listed (excluding the ones have been marked exempt for that expense category).

If you take the current expense calculation percentage (i.e. 3.4%) of the value of that total wage does it give you the same value of the expense listed? If not, the next pay recorded for that employee will include an adjustment to make it 3.4% for the calendar month.

As to a resolution, it does come down to whether or not that expense category should be calculated on a calendar basis. This I can't answer for you and probably would depend on why the rate has increased, the circumstances around that and the reason for the expense in the first place. If it should be calculated on a calendar month basis, then you are good to go it will work itself out with after this pay as this pay is doing the back-calculating. If it shouldn't then manually update the pays for this calendar month to the desired amount and next month (i.e. the payment date falls in June) then you are good to go as it would be a fresh month.

Re: Employer expense as a % not calculating correctly

Hi Steven

Thank you for your response.

I will work through it today & see if I can understand. I dont follow at this stage why it calculates expenses on a monthly basis rather than per pay period (weekly) but I'll see if becomes clearer as I give it more thought. Our premium increased with effect from 1st May and that is when I went and updated the calculation percentage and we've been having to manually override the calculations ever since.

Re: Employer expense as a % not calculating correctly

I understand what Steven M is saying here, which is similar to super calculations.

When you pay someone say $300 one pay period, no super will calculate, but when you pay them $200 the next week or fortnight and it falls in the same calendar month the super expense will be $47.50 which most will say is incorrect on a wage of $200. Thing is that MYOB knows they were paid $300 with no super and has adjusted for this.

An easy way for you to check things are working correctly is to do a dummy pay run dated paying date of 1/6/19, pay periods don't matter, and then see if the calculations are correct.

Cancel out of the payrun and don't save.

Julie Carter AIPA, BBus(Acctg),MYOB Professional Partner, Registered BAS Service ProviderAssociate Member of Institute of Public AccountantsMember Association of Accounting Techniciansph: 0417 927 654 email: accuratebooks7@gmail.comJAC' of All Trades Bookkeeping (Servicing from Leederville to Pinjarra, Fremantle to Armadale WA)

Re: Employer expense as a % not calculating correctly

Thanks Julie

I have tested as you proposed & it does indeed look like its going to calculate correctly from 1st June.

So MYOB calculates expenses by % is programmed to work for Super and everything else (we expense payroll tax, lsl cont, workers comp to jobs on a weekly basis) suffers the consequences! Thankfully there haven't been too many changes to % that I need to make on a regular basis.

I'm looking at uploading a weekly journal each week for payroll instead of trying to keep processing everything through myob which is just too cumbersome - it takes a while to get everything set up in Clearwater though to be able to run the testing.